Scotland's economic recovery is in danger of slumping into a lengthy period of stagnation according to the latest Fraser of Allander economic survey.

The study suggests the economy is now "teetering on the brink" as a result of high inflation, public sector spending cuts and economic uncertainty across the Eurozone.

As a result the Institute has again revised its economic forecast downwards for this year and 2012.

Brian Ashcroft, professor of economics at the University of Strathclyde, where the Institute is based, said: "We are teetering on the brink of what could be a considerable period of stagnation.

"We have to hope that the forces driving recovery secure the upper hand against the pressures fuelling stagnation, including public spending cutbacks, falling real household incomes, rising energy prices and the spectre of a fragmenting eurozone.

"With the weaker growth of household spending in Scotland, greater fiscal consolidation in 2011 and a sluggish outlook for private sector investment, I find it hard to see how the Scottish economy can continue to track the UK economy as it has done in recent quarters."

The Institute has now revised its Scottish economic forecast again for 2011 down by 0.2 per cent and by 0.1 per cent for 2012 from its March release.

In March it forecast Scotland's economy would grow one per cent in 2011, 1.6 per cent in 2012 and 1.9 per cent in 2013.

By comparison, the UK economy is predicted to grow by two per cent in 2011, though the Institute points out public sector spending cuts will have a greater impact in Scotland than the rest of the UK.

The Fraser of Allander Institute is a research unit within the Department of Economics at the University of Strathclyde in Glasgow.

Its Economic Commentary assessing the health of the Scottish economy was first published in 1975.